Suppose that a retired man who is a widower, wants to give $25 million to his 20-year-old unmarried grandson. If he gives the grandson the money right now, it will be subject to a gift tax and/or possibly a generation skipping transfer tax. If he gives the grandson the money via a bequest when the widower dies, the inheritance will be subject to a federal estate tax and also a generation skipping transfer tax.

If, on the other hand, the widower does something really outrageous and were to marry his grandson and then give his new grandson spouse the $25 million, the transfer could be tax-free because of the unlimited marital deduction.

Besides any personal or moral issues, from a legal perspective, could the grandfather marry his own grandson? In the old days, the answer was an obvious “no.” A man could not marry another man. How about a grandfather marrying a granddaughter? At least in Massachusetts, there is a law preventing a grandfather marrying a granddaughter. The law states:

However, now that Massachusetts recognizes same sex-marriage, that above law would not directly prohibit a grandfather marrying a grandson (presumably because the law was enacted before same-sex marriage was allowed). This would not be an issue in Missouri, because same-sex marriages are not allowed. But would it work in another state that does allow same-sex marriage and has laws similiar to Massachusetts? Who knows. Interesting from a legal perspective, but very strange.